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Choose Wisely -- Finding the Best Payday Loans

Mar 15, 2008
We've all found ourselves low on funds at the end of any given month. The money we earn sometimes doesn't cover all the bills that might come in, especially if there was an unexpected expense such as a car repair or an illness. Even with working hard and being thrifty, sometimes the money just can`t be stretched out any further. A payday loan can be somewhat of a safety valve and an alternative to borrowing money from family and friends.

A payday loan is a short term unsecured consumer loan. You do need to be working full time and have a bank account to apply for one. Usually the amount borrowed is a relatively small amount - between $100 to $500. It's up to the consumer to shop around and get as much information as they possibly can before applying for this type of loan. There are definitely some pros and cons here, but the more informed your choice is, the better the end result will be.

First it's absolutely necessary to find out about the lending institution and how long they`ve been in business. It`s wise to begin with the better known lenders. You will need to consider the fees and terms of this loan and just compare the rates among several lenders. The fees charged for these loans is usually a percentage of the amount you borrow, which is why you need to get the best one you can find.

This fee has to by law be disclosed to you ahead of time. If a lender isn't up front about either the fees or the terms, rule them out right away. This applies to whether you are looking online or in person. Before you sign or agree to anything, find out if the interest rate would change should you want to or be able to pay the loan back early. Some firms offer rebates for paying the loan back before the due date.

Another important fact to find out about are any additional fees should you require an extension for the loan. The typical term for payday loans ranges from 5 to 30 days and usually coincides with your next payday. It's best to borrow the least amount you possibly can to save on fees and to make repayment easier. Shopping and applying for these loans online makes the whole process a bit faster.

As a smart shopper, you should also know that payday loans aren't the only way to get quick needed cash advances. There are salary advances, credit card advances (though theses tend to have very high fees), and working out some kind of repayment plan for the bills you owe on is also an option. Secured credit cards can be a good way to go. They are tied to your savings account and so they usually have a much lower interest rate than regular credit card cash advances.

You might also consider religious institutions or social service agencies. They are there to help and might be a good resource to tap into. It will just take a little research on your part.

Also, most creditors will negotiate partial payments once you establish a repayment plan with them. This will allow you some extra time to pay off your bills without the stress of having to come up with a lump sum.

There are also emergency assistance programs and community organizations which are sometimes partnered with social service or state agencies. They have programs set up to help with home heating and cooling costs for households that qualify. Life is expensive and no family should have to be cold in their own home, nor should they suffer during the hottest summer months without any relief.

Another possible resource are military loans. If you have ever been in the military, you could tap into the option of applying for a payday loan through the branch of the military in which you are or were connected. These rates typically have a much lower rate than regular payday loans. The repayment terms are flexible, so that is another plus. Some companies that specialize
in military loans also provide disaster relief loans with no interest at all for 3 months if requested, or rates that are market competitive.

Whichever route you choose, get every bit of information that applies to your circumstances. Don`t go with any lending institution that doesn't have a good reputation or one that you don`t have confidence in. Find their contact information and make a list of pointed questions to ask them. Let them instill that confidence in you with by providing complete answers to your questions. You can also look them up in the Better Business Bureau to see if they have a good track record or complaints against them.
About the Author
Louise Green is a freelance writer and researcher. The consumer demand for low cost solutions to life situations has led to the creation of http://www.yourpaydayloans.org where consumers are provided with facts about smart borrowing.
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